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(1) The City shall disseminate this Terms of Proposal to potential underwriters in a manner that is <br />reasonably designed to reach potential investors; <br />(2) all bidders shall have an equal opportunity to bid; <br />(3) the City may receive proposals from at least three underwriters of municipal bonds who have <br />established industry reputations for underwriting new issuances of municipal bonds; and <br />(4) the City anticipates awarding the sale of the Bonds to the bidder who submits a firm offer to purchase <br />the Bonds at the highest price (or lowest interest cost), as set forth in this Terms of Proposal. <br />Any proposal submitted pursuant to this Terms of Proposal shall be considered a firm offer for the purchase of the <br />Bonds, as specified in this proposal. <br />(c) If all of the requirements of a "competitive sale" are not satisfied, the City shall advise the winning bidder <br />of such fact prior to the time of award of the sale of the Bonds to the Underwriter. In such event, any proposal <br />submitted will not be subject to cancellation or withdrawal and the City agrees to use the rule selected by the <br />Underwriter on its proposal form to determine the issue price for the Bonds. On its proposal form, each Underwriter <br />must select one of the following two rules for determining the issue price of the Bonds: (1) the first price at which <br />10% of a maturity of the Bonds (the "10% test") is sold to the public as the issue price of that maturity or (2) the initial <br />offering price to the public as of the sale date as the issue price of each maturity of the Bonds (the "hold -the -offering - <br />price rule"). <br />(d) I f all of the requirements of a "competitive sale" are not satisfied and the Underwriter selects the hold-the- <br />ofiering-price rule, the winning bidder shall (i) confirm that the underwriters have offered or will offer the Bonds to <br />the public on or before the date of award at the offering price or prices (the "initial offering price"), or at the <br />corresponding yield or yields, set forth in the proposal submitted by the winning bidder and (ii) agree, on behalf of <br />the underwriters participating in the purchase of the Bonds, that the underwriters will neither offer nor sell unsold <br />Bonds of any maturity to which the hold -the -offering -price rule shall apply to any person at a price that is higher than <br />the initial offering price to the public during the period starting on the sale date and ending on the earlier of the <br />following: <br />(1) the close of the fifth (5 h) business day after the sale date; or <br />(2) the date on which the underwriters have sold at least 10% of that maturity of the Bonds to the public at <br />a price that is no higher than the initial offering price to the public. <br />The winning bidder shall promptly advise the City when the underwriters have sold 10% of that maturity of the Bonds <br />to the public at a price that is no higher than the initial offering price to the public, if that occurs prior to the close of <br />the fifth (5") business day after the sale date. <br />The City acknowledges that in making the representation set forth above, the winning bidder will rely on (i) the <br />agreement of each underwriter to comply with the hold -the -price rule, as set forth in an agreement among underwriters <br />and the related pricing wires, (ii) in the event a selling group has been created in connection with the initial sale of <br />the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the hold - <br />the -offering -price rule, as set forth in a selling group agreement and the related pricing wires, and (iii) in the event <br />that an underwriter is a party to a retail distribution agreement that was employed in connection with the initial sale <br />of the Bonds to the public, the agreement of each broker -dealer that is party to such agreement to comply with the <br />hold -the -offering -price rule, as set forth in the retail distribution agreement and the related pricing wires. The City <br />further acknowledges that each underwriter shall be solely liable for its failure to comply with its agreement regarding <br />the hold -the -offering -price rule and that no underwriter shall be liable for the failure of any other underwriter, or of <br />any dealer who is a member of a selling group, or of any broker -dealer that is a party to a retail distribution agreement <br />to comply with its corresponding agreement regarding the hold -the -offering -price rule as applicable to the Bonds. <br />E-5 <br />